Great Wolf Resorts Reports Narrowing of Fourth-Quarter Losses

After reporting an increase in net income in the third quarter, Great Wolf Resorts, Inc., North America’s largest family of indoor waterpark resorts, reported results for the fourth quarter ended Dec. 31, 2011 and full-year 2011. For the fourth quarter, the company reported net loss of $14.4 million, or $0.46 per share, compared to a net loss of $29.2 million, or $0.94 per share, for the same period a year earlier. The year-over-year improvement was due primarily to the effect of higher overall revenues, along with ongoing expense discipline, as well as the net effect of a non-cash impairment charge recorded in the fourth quarter of 2010.

“Throughout 2011 we delivered outstanding operating results culminating in our second consecutive year of record adjusted EBITDA,” said Kim Schaefer, chief executive officer. “Our ongoing commitment to providing our guests with a superior experience, combined with the value of a Great Wolf Lodge getaway, continues to resonate with consumers. During the year, we successfully accomplished our goal of attracting an increased number of new guests to our resorts, creating a strong pipeline of potential future repeat visits. We continue to refine our sales and marketing strategies which, combined with enhanced amenities and a stabilizing economy, should result in ongoing growth as we progress through 2012 and beyond.”

Total revenues increased 4.7 percent to $65.5 million from $62.6 million in the fourth quarter of 2010, due primarily to increased demand at the company’s resorts. Adjusted EBITDA in the 2011 fourth quarter increased 15.7 percent to $13 million from $11.2 million in the fourth quarter of 2010. As a percentage of total revenue, adjusted EBITDA was 19.8 percent, up 188 basis points from 18 percent in the fourth quarter of 2010. Same-store RevPAR in the fourth quarter of 2011 was up 6.4 percent (6.6 percent increase using constant dollars, which normalizes the foreign currency translation effect on operating statistics of the company’s Canadian resort) compared to the 2010 quarter.

Same-store occupancy was up 220 basis points compared to the prior-year quarter. Same-store ADR increased 2 percent (2.1 percent increase using constant dollars) compared to the 2010 quarter. Total same-store revenue per occupied room (total RevPOR), which includes revenue from rooms, food and beverage, and other amenities, increased 1.1 percent (1.2 percent increase using constant dollars) compared to the prior year quarter. Same-store RevPAR for Great Wolf’s Generation II resorts, which are generally larger resorts that better represent the company's current resort development model and contribute about 80 percent of the company’s adjusted EBITDA, increased 7.1 percent (7.3 percent increase using constant dollars) in the 2011 fourth quarter versus 2010. Same-store occupancy increased 270 basis points, same store ADR increased 1.9 percent (2 percent using constant dollars), and same store total RevPOR for Generation II resorts increased 0.7 percent (0.9 percent using constant dollars) in the fourth quarter of 2011 as compared to the 2010 quarter.

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